More troubles for Interpublic as FCB Brasil is implicated in Petrobas kickbacks scandal

It’s not turning out to be a good week for Interpublic. Today CEO Michael Roth reported a Q1 loss (smaller than last year but none of its peers appear to do this) and now FCB Brasil has been implicated in the ‘Operation Carwash’ scandal into $2.7bn worth of bribes, kickbacks and rip-offs at state-owned oil producer Petrobas.

FCB is accused to paying $110,000 of production company rebate (an issue in itself, presumably) to a company owned by former congressman Andre Vargas who has already been arrested for similar payments made by, among others, fellow IPG agency Borghi/Lowe. The same IPG executive Ricardo Hoffman, who worked at both agencies, is also being detained.

FCB Brasil says: “The transfer of the production company credit [owed to FCB] to another company was done without adequately examining the ownership of this company. This form of payment was solicited by Ricardo Hoffman as remuneration owed to him for a consulting project. Corrective action has already been taken by FCB in relation to this unique and isolated event.”

We’ll have to wait and see quite how isolated this all this – and whether or not Hoffman is a loose cannon or not (he hasn’t been convicted of anything yet).

What’s for certain is that IPG could do without this stuff. CEO Roth has activist investors Elliott Management standing on his neck. Should any more instances of alleged malfeasance emerge, life could become even trickier.

About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.